Video: Petraeus affair, political fight over Libya rattle Washington

MR. DAVID GREGORY: This morning on MEET THE PRESS. How the Petraeus affair and the political fight over Libya have rattled Washington, just as the president hoped for a new start with Congress over the debt.

Embattled former CIA Director David Petraeus testifies privately on Capitol Hill, insisting that his resignation had nothing to do with the botched response to the attack in Libya. All of this as we’re still getting a daily dose of unpleasant details about General Petraeus’ affair with biographer Paula Broadwell, and the role that Florida socialite Jill Kelley played in the still unfolding drama.

And the clash over Benghazi heats up as GOP senators charged that the president’s U.N. secretary misled the country about the attack on MEET THE PRESS and other programs.

(Videotape)

SUSAN RICE: Our current assessment is that what happened in Benghazi was in fact initially a spontaneous reaction to what had just transpired hours before in Cairo.

(End videotape)

GREGORY: Now sparking a war of words with the president, senators are threatening to block her potential nomination as Secretary of State.

(Videotape)

SEN. LINDSEY GRAHAM: The reason I don’t trust her is because I think she knew better, and if she didn’t know better, she shouldn’t be the voice of America.

Plus, the key figures trying to get to the bottom of Benghazi and the Petraeus affair. Chair of the Senate Intelligence Committee Senator Dianne Feinstein of California. And Chair of the House Intelligence Committee, Congressman Mike Rogers of Michigan.

Then, after the election, will Washington get anything done? Talks start on how to avoid the fiscal cliff, as Mitt Romney draws fire from fellow Republicans by accusing the president of doling out, quote, “Gifts to minority groups in exchange for their vote.” What’s the fall out and the future of the GOP?

ANNOUNCER: From NBC News in Washington, the world’s longest running television program, this is MEET THE PRESS with David Gregory.

GREGORY: Good Sunday morning. With the president’s national security team under fire over the Petraeus resignation and the Benghazi attacks, the president arrived on the world stage this morning for a summit in East Asia, and he’s got new worries on his mind about the prospect of a war in the Middle East as Israel and Palestinian militants get closer to the brink this weekend, Israel expanding its air assault against Hamas and Palestinian militants continuing to fire rockets into civilian areas of Southern Israel. That’s where I want to begin this morning. I’ve got NBC’s chief foreign affairs correspondent Andrea Mitchell and New York Times columnist Tom Friedman. And who better to have to discuss this. Tom, as-- as these two sides get closer to the brink, based on your experience and your reporting, where is this going?

MR. THOMAS FRIEDMAN (Columnist, New York Times): Well, let’s just go around the horn, David, very quickly. I think Hamas is trying to use this moment in order to both break out of the blockade and try to end targeted killing of its leaders from Israel, and they’re trying to take advantage of the new Arab Spring balance of power, with Muslim Brotherhood government in Egypt, you know, to leverage that possibility. Israel. Israel has been watching for the last six to nine months Hamas bringing in longer and longer range missiles from Iran. I think they-- they saw this as an opportunity and necessity to take those out, missiles that can now hit Tel Aviv and Jerusalem. Egypt. This is a real problem for Egypt. You’ve got a new Muslim Brotherhood government there. They need money from the United States. They don’t want to be caught in-- in-- as the rope and struggle between Israel and the Palestinians. For Iran, this is a godsend. It takes world attention off of their nuclear program and puts pressure on all the more moderate forces in the Arab world, puts them in the head and lastly, Syria, couldn’t be a better day for Bashar al-Assad. It takes all the attention off Syria. Israelis and Palestinians fighting, no one is looking at the murderous campaign of Assad against his own people.

GREGORY: And Andrea Mitchell, then, the diplomacy for President Obama about to start a second term with all of the problems in the Middle East. He’s in Bangkok this-- this morning. He talked about his support for Israel.

PRESIDENT BARACK OBAMA: There’s no country on earth that would tolerate missiles raining down on its citizens from outside its borders. So, we’re fully supportive of Israel’s right to defend itself from missiles landing on people’s homes and workplaces and potentially killing ci-- civilians. And we will continue to support Israel’s right to defend itself.

(End videotape)

GREGORY: So, let’s talk about with how the president is working this right now, Andrea?

MS. ANDREA MITCHELL (NBC News Chief Foreign Affairs Correspondent): Well, working this by trying to persuade President Morsi of Egypt to please, you know, pull back and to pressure Hamas for a cease-fire. That is where the action is. The Arab Spring is what changed all of this. All of the elements that Tom just addressed were, you know, completely transformed by the fact that you have Morsi and not Mubarak. So you don’t have a reliable dictator or totalitarian leader in Egypt whom the United States can do military to military and diplomatic relations with. You have an Islamist Muslim Brotherhood, and that is where the concern is for Israel, the concern that these longer-range rockets have been going through, being smuggled in through the tunnels from the Sinai. And the-- the real critical issue here now is where-- who-- where is the end game? How do they get out of this? The problem has partly been America’s problem. The benign neglect of the last couple of years, letting the Israeli-Palestinian issue moulder, not boosting Abbas when he needed-- Mahmoud Abbas, the leader of the more moderate Palestinian group, has enabled Hamas to broker these relationships and now they’ve got Morsi and others in play with them.

GREGORY: And in the immediate term as I talk to Israeli officials, they still will not rule out a ground invasion which presumably could happen anytime. Andrea, Tom, we’ll hear from you again later in the program as we get into our roundtable. Thank you both very much.

I want to turn now to the House and Senate intelligence chairs from Michigan Republican Congressman Mike Rogers and Democratic Senator from California Dianne Feinstein. Welcome to both of you.

GREGORY: I-- I want to stay in the Middle East and talk about what has been a-- a central preoccupation for you in hearings this week, and that is the aftermath of this terror attack on our consulate in Benghazi in Libya, of course. And again, as we’re on the air this morning, the central question is, who knew what when, and how was this described to the American people? Did they-- did the government say what it was, when it first happened? And you had former CIA director David Petraeus testifying in private at the end of the week on Friday. This is how the AP describes his testimony, and one of the contradictions that it appears to bring up. “Ex-CIA Director Petraeus told lawmakers during private hearings Friday that he believed all along that the deadly attack on the U.S. consulate in Libya was a terrorist strike, even though that wasn’t how the Obama administration initially described it publicly. Representative Peter King of New York said Petraeus had briefed the House intelligence committee on September 14th, and he does not recall Petraeus being so positive at the time that it was a terrorist attack. He thought all along that he made it clear there was terrorist involvement, King said. That was not my recollection.” So Senator Feinstein, did Petraeus contradict himself or has he contradicted the White House’s version of events?

SEN. FEINSTEIN: We have a transcript of that meeting on that day. And Petraeus very clearly said that it was a terrorist attack and outlined who he thought might be involved in it. So any…

SEN. FEINSTEIN: That’s the day after the attack. I think there’s no question about it. What-- what has concerned me about this is really the politicization of a public statement that was put out by the entire intelligence committee, which Susan Rice on the 16th, who was asked to go before the people and use that statement, did. I have read every one of the five interviews she did that day.

GREGORY: Right.

SEN. FEINSTEIN: She was within the context of that statement. And for this, she has been pilloried for two months. I don’t understand it. It has to stop. If it continues, it’s going to set up once again a partisan divide in these-- the House and the Senate, which Sena-- which Congressman Rogers and I have tried to overcome and have overcome with some success with respect to the intelligence committees.

GREGORY: But Congressman Rogers…

REP. MIKE ROGERS (R-MI, Chair, House Intelligence Committee): Yeah.

GREGORY: …to my understanding, talking to government officials, is that what Susan Rice said on MEET THE PRESS five days after the attack and other programs as well, was very similar to what then Director Petraeus said privately on September 14th, that there appeared to be a terrorist element to it but that-- that it appeared first to be spontaneous but became a terrorist attack, and that that was his belief. So were they not speaking basically in the same way?

REP. ROGERS: Well, first of all, why-- why are we doing the investigation? I think that’s important. So our job as chairman of the intelligence committee is to make sure we did not have an intelligence failure. Didn’t-- was there an intelligence failure on that day? That’s the first question we have to get right. And I’ll tell you, I am with a high degree of confidence today will tell you that there was not an intelligence failure. The intelligence community had it right, and they had it right early. What happened was it worked its way up through the system of the so-called talking points, which everyone refers to, and then it went up to what’s called a deputy’s committee. And what I found fascinating about this investigation, and, again, my role here in my mind is to say, was there an intelligence failure? If so, how do we prevent it from happening again? It went to the so-called deputy’s committee, that’s populated by appointees from the administration. That’s where the narrative changed. And so how that thing got back to Senator Rice, I think, is probably another question.

GREGORY: Ambassador Rice.

REP. ROGERS: What we do-- Ambassador Rice, excuse me. We do know-- we do know that the intelligence community as they presented it was accurate. And it did include terrorism and included the notion of what was asked.

SEN. FEINSTEIN: Well-- well, I’d like to respond to that.

GREGORY: Okay. But can I just do this to-- to frame this a little bit? We’re showing Susan Rice there on MEET THE PRESS. Let me just play the critical clip from that morning and then have you make your point, senator. This is Susan Rice on five days after the attack.

GREGORY: Can you say definitively that the attacks on-- on our consulate in Libya that killed Ambassador Stevens and others there security personnel, that was spontaneous? Was it a planned attack? Was there a terrorist element to it?

SUSAN RICE (U.S. Ambassador to the United Nations): Well, let us-- let me tell you the-- the best information we have at present. First of all, there’s an FBI investigation which is ongoing, and we look to that investigation to give us the definitive word as to what transpired. But putting together the best information that we have available to us today, our current assessment is that what happened in Benghazi was, in fact, initially a spontaneous reaction to what had just transpired hours before in Cairo. Almost a copycat of-- of the demonstrations against our facility in Cairo, which were prompted of course by the video.

(End videotape)

GREGORY: Senator, you said that two days before that, Director Petraeus said it was terrorism. Why didn’t Ambassador Rice call it terrorism two days later?

SEN. FEINSTEIN: Because she could speak publicly only on unclassified speaking points. I have some concern with those speaking points. But let me correct one thing.

GREGORY: Right. But what are the concerns and why speak at all? In other words, why were-- why was there a reference to it being a terrorist attack taken out of the public talking points?

SEN. FEINSTEIN: That is something that we’re going to find out. But they-- but it was. That’s the point. Now, with the allegation that the White House changed those talking points, that is false. There is only one thing that was changed, and I’ve checked into this. I believe it to be absolute fact. And that was the word consulate was changed to mission. That’s the only change that anyone in the White House made, and I have checked this out.

REP. ROGERS: And-- and this one is a counterpoint here, and-- and again, we get along well, we may disagree on this issue. But we get along well on many, many issues. What they-- what was said and-- and as I conclude the course of that investigation was that at some point, that those so-called talking points, in other words, the narrative of how we would call this event, went up to what’s called a deputy’s meeting. When-- when asked, there was no one in the professional intelligence community could tell us who changed what. So that-- there-- there goes the disconnect. So the intelligence community said this is-- this was a terrorist act.

(Cross talk)

GREGORY: Why wouldn’t we call it what it was? That’s what I don’t get.

GREGORY: Why not just call it what it was? Who-- why are we protecting?

SEN. FEINSTEIN: I happen to think that’s absolutely correct. I don’t know who we were-- who we were protecting. I do know that the answer given to us is we didn’t want to name a group until we had some certainty. Well, where-- where this went awry is anybody that brings weapons and mortars and RPGs and breaks into an asset of the United States is a terrorist in my view. I mean, that’s pretty-- pretty clear. Also the other point was, once the video was put together, it was clear there was no demonstration. This should have been known much earlier. It also raises the concern of talking points by committee. And I have some concern about that.

GREGORY: But was there a cover-up? Do you believe that the president or anybody serving the president deliberately misled the American people about the true nature of this attack for political reasons?

SEN. FEINSTEIN: No, no.

GREGORY: Absolutely not, senator?

SEN. FEINSTEIN: That’s correct.

REP. ROGERS: I don’t…

GREGORY: Do you-- do you believe anyone misled the American people deliberately for political reasons?

REP. ROGERS: Well, this is what I know. I know the narrative was wrong and the intelligence was right. Now, getting between there and there, I think you have to be careful about making those accusations. I think you should have to prove it-- as an old FBI agent, you should prove it first.

GREGORY: …does contradict Susan Rice. This is important. You’re saying, Petraeus says, look, I said it was terrorism all along. Susan Rice told the American people…

REP. ROGERS: Well.

GREGORY: …no, we thought it was spontaneous. There’s a disconnect.

REP. ROGERS: And even more important-- even more important than that, the-- the narrative as it went from the-- at least the CIA and other intelligence agencies was accurate as for what we know today. It was an act of terrorism. We knew that. So the difference was what happened when it went outside the intelligence community for, as-- as the senator called it, you know, a committee to look at this thing and make the determination on what the narrative was. The narrative was wrong. And why that’s important, this isn’t just about…

GREGORY: Yeah.

REP. ROGERS: …parsing words and who was right. There were some policy decisions made based on the narrative that was not consistent with the intelligence that we had. That’s my concern. And we need to say, hey, we need to figure out how that happened, and let’s make sure this doesn’t happen again.

SEN. FEINSTEIN: We gave…

GREGORY: Did our people die because we didn’t protect them adequately? Is that the bottom line here?

SEN. FEINSTEIN: …we gave the direc-- David, we gave the direction yesterday that this whole process is going to be checked out.

SEN. FEINSTEIN: We are going to find out who made changes in the original statement. Until we do, I really think it’s unwarranted to make accusations.

GREGORY: But can I ask this? Did our people die in that consulate because of the government’s failure to adequately protect them? Be that the State Department, be that the CIA?

SEN. FEINSTEIN: Well, that’s another subject. That’s another subject.

(Cross talk)

REP. ROGERS: There are two issues here. One is the physical security of the consulate itself. Based on all the intelligence that we knew, all of that information said clearly there was a high degree of threat. I believe that there was a catastrophic failure in recognizing that threat posture clearly on that date. That’s a separate issue than the intelligence issue. We had-- clearly, the intelligence was right. Clearly, others had made decision based on that threat including other nations had pulled out of Benghazi. We knew all of that was going on through the investigation. But the State Department for whatever reason didn’t make the adjustments. I argue, and I think the Senator would argue, would have been prudent to protect the lives of the-- that’s one issue. The second issue is the narrative that was created following it did not match the intelligence. And did the policy decisions that happen afterward cause problems for the United States? And I argue it has, which is why we have agreed together we’re going to get to the bottom of how that happened.

SEN. FEINSTEIN: If I might say, I think we are vulnerable. Intelligence should be used in assessing the safety of our 285 diplomatic missions all over the world. And there should have some precise effect. As of mid-August, we know that Ambassador Stevens was very unhappy with the level of security. And we’ve seen that testimony. We also know that some improvements were made to the annex. I believe that the security aspect of this is one of the biggest things. I went through hundreds of threat warnings, threat warning, after threat warning, after threat warning over the last six months. And also the prior events that had taken place. There is no question that Benghazi was one of the most difficult places. It should have had much better security, and no one should believe that these militias who were unarmed, who were stationed in front of his security are going do anything other than run when they see people approaching them with guns.

GREGORY: I want to return to the personal aspect of Director Petraeus who had to resign because of his affair with Paula Broadwell. Senator, you initially thought it was too bad that he had to resign, that you wished the president hadn’t accepted it. I know he testified before you, apologized for his affair, but he did so privately. I was last with Director Petraeus when he was commanding our forces in Afghanistan. That was back in 2010 and I remember spending a lot of time with him there. And at that time, he was so-- so relished the opportunity to be back in the theater of war, commanding our forces, he seemed to be improving his relationship with the Obama administration where that had been strained. Can you give me some personal sense of how he appeared before you on the substantive matters but also the personal matters at hand?

SEN. FEINSTEIN: Yes, I can. For me, personally, this is a heartbreak. I respect David Petraeus. I respect his 37 years of service to our country. I respect his command ability. I respect this great intellect that he has where he can speak literally on dozens of subjects. You know, training manuals, counterinsurgency, various military tactics. And he is one of our brightest and our best. There is no counter to that. Here’s a problem that we have. Our tours are long. They are multiple. Whether you’re a private or a four star, coming back into civilian society is difficult. Here’s a man, and you see TimeMagazine, and you see the medals he has. You see the stars. One day, he takes all of that off. He’s in a plain blue suit like this. He looks no different from you or you or you. He looks a bit different from us. Having said that, there’s-- there’s no entourage. There’s no driver. He gives an order at the CIA. There’s discussion. There’s flak. People don’t like this. And then he goes home to wash dishes. It is a major adjustment. I think we need to look at this transitioning of people. I think we need to look at our tours. Now this is not an excuse.

SEN. FEINSTEIN: And I think the president did the right thing in accepting the resignation.

GREGORY: Is his government service over in your judgment?

REP. ROGERS: I don’t know. Remember, this is still ongoing. Let me-- how this started is very important. Because you hear a lot of people thinking this was the FBI investigating a sexual undisclosed affair. Not the case. This started by a cyber threat that certainly had elements that would rise to the level of, well, blackmail. Now, a senior government official, not Mister Petraeus, also weighed in at some point in this investigation-- before the investigation was open, and said I think we have a security threat issue here that needs to be investigated. Now, that’s how this case got started. And why that’s important is because if you are a brand new CIA officer, and I have all the respect for David Petraeus and I hope his family goes through a healing process and then he’ll move on with his life, but if you’re a brand new case officer at the CIA and have an undisclosed relationship and an undisclosed way of communicating outside of the bounds, you get fired. Why? Because it’s a counterintelligence threat to someone who has very sensitive and classified information. That’s how it got started. And it probably should have been brought forward earlier as a national security threat, both to Congress and other players.

GREGORY: You think the president should have been told before Election Day?

REP. ROGERS: I’m not-- I'm not sure the president hasn’t-- was not told before Election Day. The attorney general said that the State Department-- excuse me-- the Department of Justice did not notify the president. But we don’t know if the attorney general did.

GREGORY: You think the president-- that’s new-- that’s news that the president knew before Election Day.

REP. ROGERS: There was no formal notice to both Congress or the intelligence community.

GREGORY: Right.

REP. ROGERS: I find it-- we just have to ask the question. I hope he’ll come out and talk to us about it.

SEN. FEINSTEIN: I spoke to the attorney general.

REP. ROGERS: We could-- we could resolve-- we could resolve this very quickly with a conversation in the intelligence spaces if he did have that conversation with the president.

GREGORY: All right, final point here, senator? Final point.

SEN. FEINSTEIN: Well, I spoke to the attorney general. He explained the process that the FBI carried out, and that there’s a reason for that. And the reason for not disclosing it is so that there is no manipulation, that there’s an ability to move ahead without any political weighing in on any side.

Up next, more on the Petraeus affair and the political battle over the Obama administration’s handling of the attack on Benghazi. We’ll get reaction here from the man leading the charge against the administration and against Ambassador Susan Rice; Senator Lindsey Graham.

And later, fallout from the campaign after Mitt Romney’s surprising comments this week and the future of the Republican Party. Our roundtable weighs in on that. Tom Friedman and Andrea Mitchell will rejoin the conversation. Plus, Republican Congressman Raul Labrador, former White House chief of staff for President Clinton John Podesta, and GOP strategist Mike Murphy, ahead here on MEET THE PRESS.

(Announcements)

GREGORY: Coming up, the president publicly defended his U.N. Ambassador Susan Rice this week against pointed criticism from Republicans.

PRESIDENT BARACK OBAMA: If Senator McCain and Senator Graham and others want to go after somebody, they should go after me.

GREGORY: Senator Graham is here this morning to respond. Coming up next.

(Announcements)

GREGORY: We are back. Joined now by the man leading the charge against the Obama administration and U.N. ambassador Susan Rice on this issue of Benghazi, the senior senator from South Carolina Republican Lindsey Graham. Senator, let’s get right into it. You’ve just heard the chairs of the Intelligence Committees on Benghazi. The bottom line point, did Director Petraeus call this terrorism from the get go? They say yes. They don’t understand why the administration didn’t call it the same two days later. How do you react?

SEN. LINDSEY GRAHAM (R-SC; Armed Services Committee): Well, I think one of the reasons that Susan Rice told the story she did, if the truth came out a few weeks before the election that our consulate in Benghazi, Libya, had been overrun by an al Qaeda sponsored or affiliated militia, that destroys the narrative we’ve been hearing for months that al Qaeda has been dismantled, bin Laden is dead, we’re safer. And Susan Rice just did not say it was a result of a mob spawned by a video like Cairo. She actually said on Face The Nation, “I want to remind the American people this president promised to go after bin Laden, refocus on al Qaeda. He got bin Laden. Al Qaeda has been dismantled. And the truth of the matter is nothing could’ve been further from the truth, and the story she told reinforced a political narrative helpful to the president, but disconnected from reality.

GREGORY: But let me just interrupt on that point. Let’s be-- be very clear about what you’re saying because you also heard Senator Feinstein say unequivocally the notion that there was a cover-up or an attempt to mislead for political reasons is absolutely wrong. She says that it’s character assassination, the way you’re criticizing her, who-- you believe the president of the United States sent his ambassador to the U.N. out to mislead the American people so that he could get some sort of political gain before the election? That’s the cover-up you-- you’re accusing them up?

SEN. GRAHAM: No. I’m saying that the ambassador that had nothing to do with Benghazi-- why would you choose someone who had nothing to do with Benghazi to tell us about Benghazi? That’s kind of odd. The president said, why pick on her? She didn’t know anything about Benghazi. She was the most politically compliant person they could find. I don’t know what she knew but I know the story she told was misleading. I don’t know why it was misleading. But let me put this in context. Would this White House mislead the American people about national security events? I think they might simply because when the bin Laden raid occurred, they leaked every detail about the raid. We have a Pakistani doctor in custody because he told about the role he played. The underwear bomber case where we stopped a plot in Yemen came out in the New York Times. They told us about how this administration stopped the cyber-- the role of cyber attacks on Iranian nuclear program in three weeks. We heard a lot of details about classified information to make this president look good. So would-- if they would leak classified information to make him look good, would they withhold information to prevent him from looking bad? I think you could say look at that. And secondly, our Democratic colleagues on the Valerie Plame case and Scooter Libby, all insisted the Bush administration could not investigate themselves. When we alleged that the leaks at the highest level of government that compromised classified information to help the president look strong politically, they would not agree to special counsel. You got two U.S. attorneys under Eric Holder investigating the highest levels of this government for crimes, leaking classified information to make themselves look good. Now, you have a situation where we’re being the mis-- the American people are being misled, and details that could hurt them politically, are not coming forth until after the election.

GREGORY: Why Senator-- hold on, one second. Why did the…

SEN. GRAHAM: So, I want to get to the bottom of it.

GREGORY: Why did the office of the Director of National Intelligence on September 28th issue a statement in which they-- effectively bolstering the very remarks that Susan Rice made on this program and others, that there was a spontaneous element to this and there was-- contradictory information? Was she not working off the same-- talking points that the intelligence community was working off of and that were changed or were not said publicly, as Senator Feinstein said, for some reason to-- to cover up or to-- to not tip their hand that they were investigating these terror groups?

SEN. GRAHAM: Isn’t it kind of odd, if the reason is to take al Qaeda out of the equation, to make sure that al Qaeda doesn’t know that we are onto them, that the story they told helps the president enormously three weeks before the election because I don’t buy that for one bit. That-- that makes no sense to me. Al Qaeda knew we knew about them. We had people in Germany that survived the attack that could be interviewed. We had drones overhead. I think it’s very odd that the storyline they chose omitted al Qaeda…

GREGORY: Mm-Hm.

SEN. GRAHAM: …which would help the president enormously, and I don’t buy it. So-- and I don’t buy the Intel community did a great job. I-- I like Mike Rogers and Dianne Feinstein, but to say the intelligence committee-- community did a good job, what about the months before this attack? What about the rise of al Qaeda in Benghazi? What about the British ambassador closing the consulate in Benghazi because it was too dangerous for the British? What about the Red Cross leaving? What about all of the warnings come out of Benghazi? Did the CIA tell the president that Benghazi is falling into the hands of al Qaeda? And I blame the president more than anybody else. Susan rice is a bit player here. Was he-- was he informed of the June attack on our consulate where they blew a hole where 40 people could go through? Was he aware of the August 15th cable where Stevens was saying we can’t withstand a coordinated al Qaeda attack? There are 10 militia groups all over Benghazi. I blame the president for…

GREGORY: Senator….

SEN. GRAHAM: ….making this a death trap. I blame the president for not having assets available to help these people for eight hours. We need a select committee not only to look at intelligence failures, but how could the Department of Defense not help these poor people for over eight hours and why did the Department of State for months ignore pleas for help? We need to get this under one roof.

GREGORY: Senator, can Susan Rice-- can Susan Rice be confirmed of Secretary of State if nominated by the president?

SEN. GRAHAM: I-- I don’t know. You know, I’m deferential to the president’s picks. I voted for Kagan and Sotomayor. President, oh-- Senator Obama voted against John Bolton, Elido and Roberts. He had a very high bar for confirmation. I have a very low bar. I’m going to listen to what Susan Rice has to say, put her entire record in context, but I’m not going to give her a plus for passing on a narrative…

GREGORY: But your…

SEN. GRAHAM: …that was misleading to the American people…

GREGORY: You wouldn’t filibuster her nomination?

SEN. GRAHAM: ….and whether she knew it was misleading or not. I’m going to wait and see what the State Department’s review has, but I’m very disappointed in-- Susan Rice, somebody who had nothing-- who knew nothing about Benghazi, telling a story that was disconnected from reality that did make the president look good at a time when quite frankly the narrative should-- should have been challenged, not reinforced that al Qaeda was dismantled. That’s what they wanted us to believe, that al Qaeda was dismantled, and Benghazi was exhibit A that that storyline was not working and was untrue.

GREGORY: Let me turn to the issue of David Petraeus and his resignation because of his affair. He’s been central to this Benghazi testimony. But the cover of-- Time magazine gets to something else, the headline, The Petraeus Affair. How his fall, it says, exposes a system failure at the highest levels of national security. You just heard Chairman Rogers say that he actually thinks the president knew before Election Day about this affair with Paula Broadwell. Do you believe that?

SEN. GRAHAM: I could see how he would not know, to be honest with you. I’m just not here to pick on the president. I look forward to working with him on immigration and solving the fiscal cliff problems. But I’m going to get to the bottom of Benghazi and hold him accountable for a national security breakdown, but when it comes to the affair itself, it seems the oddest story in the world that an FBI agent on his own decided to get the FBI to look in e-mails that were threatening. If that’s going to be the standard of federal investigations, they better increase the FBI by a 100 percent. That whole thing is bizarre to me. I’m not interested in it unless there’s a national security component. And actually I could see how the president would not know that.

GREGORY: Before you go, Senator, I know it’s-- it’s head spinning. There’s so much to talk about, including politics and the future of your party. But all of these things are very much on the menu right now. Mitt Romney…

SEN. GRAHAM: Right.

GREGORY: …got a lot of attention this week by talking about gifts he thinks the president gave to minorities to get their vote, to fundraisers. This is a portion of what he said. I want to get your reaction to it.

MR. MITT ROMNEY (Donor Conference Call; Wednesday): What the president-- president’s campaign did was focus on certain members of his base coalition, give them extraordinary financial gifts from the government and-- and then work very aggressively to turn them out to vote. And-- and that strategy worked.

SEN. GRAHAM: We’re in a big hole. We’re not getting out of it by comments like that. When you’re in a hole, stop digging. He keeps digging. The Hispanic community, 71 percent voted for President Obama, and they’re all disappointed in President Obama. There’s high unemployment among the Hispanic community. President Obama did not embrace comprehensive immigration reform like he promised. But they voted for him because he’s a lesser of two evils. Self deportation being pushed by Mitt Romney hurt our chances. We’re in a death spiral with Hispanic voters because of rhetoric around immigration. And candidate Romney and the primary dug the hole deeper. You know, people can be on public assistance and scheme the system. That’s real. And these programs are teetering on bankruptcy. But most people…

GREGORY: Yeah.

SEN. GRAHAM: …on public assistance don’t have a character flaw. They just have a tough life. I want to create more jobs and the focus should be on how to create more jobs, not demonize those who find themselves in hard times. Our party can adjust. Conservatism is an asset. But rhetoric like this keeps digging a hole for the Republican Party and if we don’t stop digging, we’re never going to get out of it.

GREGORY: Senator, there’s more to get to but I have to leave it there this morning. I thank you very much.

SEN. GRAHAM: Egypt. Watch what you do and how you do it. You’re teetering with the Congress on having your aid cut off if you keep inciting violence between the Israelis and the Palestinians.

GREGORY: We’ve covered it all. Senator, thank you for that. I appreciate it very much. Yeah, other than that, have a nice day.

SEN. GRAHAM: I can’t think of anything else to say.

GREGORY: But I want to thank you, Senator. I want to turn to our roundtable, Andrea Mitchell, Tom Friedman back with us. We also are joined by Republican Congressman from Idaho Raul Labrador, former White House chief of staff for President Clinton, John Podesta; and our friend GOP strategist Mike Murphy. Welcome to everybody. So yes, I want to get to as much as we can, including some of this Republican fallout a little bit later.

MS. MITCHELL: Mike Rogers, the Republican chair, threw a hand grenade in the middle of this table when he suggested that the president of the United States might have had prior knowledge before the election of what was going on with David Petraeus, that Eric Holder was aware of it, the attorney general, and that it’s not credible that Eric Holder would not have told the president. This is going to raise a lot of questions. Holder is going to be called to attention on the Hill. The other thing is clearly the disconnect between what the senators believe, which was that there was not an intelligence failure but there was certainly a failure then to follow up. Did the State Department-- why did the State Department not increase security, not ask for more security after the intelligence community made it very clear? And was there politicization? Dianne Feinstein says no. All of this is now going to be examined out (Unintelligible) and now you’ve also got an IG investigation into whether Petraeus misused personal assets or re-- resources, official assets, to further his relationship. And if you look at the way he lived with all of the entourage that he still maintained as CIA director, I don’t know how they close that down. That is a very-- fraught with difficulty.

GREGORY: Isn’t it-- isn’t it interesting, I mean just on the-- on the Petraeus thing, there’s something so intensely personal about it in part of the people’s reactions, Mike Murphy, that should he have been investigated? Should we have resigned? I mean listen to Senator Dianne Feinstein talk about, hey, you know, instead of really coming down hard on him, we’ve got to think about how hard it is to come off of command in a warzone back to a civilian job, and that readjustment is tough and could have led him to stray. She’s not making an excuse, but people really have an intense personal reaction to this.

MR. MIKE MURPHY (Republican Strategist): Yeah. I know it’s a big complicated thing when you have a great patriot like that who served the country so well. But as a point of honor, he either broke the rules at the CIA or if it becomes true there was an affair when he was in command of the forces he really broke the rules there. He denies it. I tend to believe him. I think he did the right thing. But whether or not now, we have to investigate for a year the details of, you know, who paid for the coffee at Starbucks, and they…

GREGORY: Right.

MR. MURPHY: …shut it down. He-- he-- he took the honor bullet and repaired the intelligence service (cross talk)…

GREGORY: We-- we have lived through this with President Clinton, an impeachment, and Monica Lewinsky. And there is a view out there of, you know, A, why do we need to know all of this stuff about e-mails between the Kelley sisters and General Allen and some of these other details?

MR. JOHN PODESTA (Chair, Center for American Progress): Well, if Aaron Sorkin wrote it, and you wouldn’t believe…

GREGORY: No.

MR. PODESTA: …the-- the story but, you know, I think Mike’s right. I think that, you know, we know what we know. There’re some-- there are legitimate issues around Benghazi. I think this…

MR. PODESTA: …really ought to get shut down. With respect to what Andrea said about Mike Rogers tossing this hand grenade on the table, I would note he did it with zero evidence. You know, in 1993, back to the Clinton era, Andrea will remember this, I recommended strict protocols between the Justice Department and the White House which were implemented. I’m sure they’ve changed to some extent but there is a reason why the Justice Department doesn’t talk to the White House about ongoing active investigations. I think that President Obama ought to direct the Attorney General to o-- obviously review those and-- and report to him about whether they could be improved but there’s-- there are very good reasons why the Justice Department doesn’t talk to the White House about in-- about investigations.

GREGORY: Congressman, I haven’t heard from you so far this morning. Weigh in on what you’ve heard so far.

REP. RAUL LABRADOR (R-ID): Well, I-- I think it’s interesting to see than-- the Justice Department may have not talked to the President, but they had a duty to talk to the intelligence committees and they didn’t. And if you remember last week, I think Dianne Feinstein was very upset because nobody talked to her. And I think Dianne Feinstein is actually going to be the key to finding out what’s happening here because she’s not happy. She is trying to defend the administration right now, but she’s not happy that a sec-- a-- as the-- as-- as a committee chairman she would-- nobody talked to her about this investigation. I want to get back to Ambassador Rice for a second, though. Lindsey Graham is absolutely right. She was misleading on your show. And she was misleading on every single show that she appeared. On your show, she said, we have decimated al Qaeda. If you remember that, right after that clip that you showed, she made it-- she-- she emphasized that we have decimated al Qaeda. She emphasized not just once, but two or three times on your show that this was a response to a hateful and offensive video. She wanted the narrative to be something-- a-- a different-- different than what the intelligence community was telling her after she won last year.

GREGORY: Again, I think that will not stand without being pushed-- a-- rebutted, particularly this issue of if she was working off talking points where the terror element was taken out, why was that the case? And-- and the intelligence chairs do not agree with the assessment that somehow she was misleading. And I think that’s important for people watching this, this morning that that debate will continue and of course it’s adamantly denied by the president and others that she would willfully mislead or what Senator Graham said, wanted to somehow, you know, cover up or make a political point. Tom, if you can, sort of catch all of these things together. This sort of human reaction to Petraeus, the impact on-- on-- on the national security team, at a time when this is now-- this Benghazi question is coming up in such a furious way.

MR. FRIEDMAN: Well, I want to go back first to Petraeus. You know, I think Petraeus exhibited a singular act of leadership when he summoned the country for the surge that saved Iraq from really going into a death spiral. It would have been a-- a great disaster for American foreign policy. At the same time, though, that surge in Iraq coincided with a Sunni Muslim surge of their own, driven entirely for their own reasons to break with al Qaeda, side with the United States. It was the combination of our surge and the Sunni uprising that made that success. We completely over read that, is my belief. And Petraeus turned that into a counterterrorism strategy that he said I did it in Iraq, now I can do it in Afghanistan. That same thing has been a complete failure in Afghanistan precisely because there was no Afghan surge. We keep training Afghans, training Afghans to fight, okay? Every time I hear that, you know, I’m-- I’m thinking, who in the world has to train Afghans to fight? But any time you’re training Afghans to fight, you’re in the wrong place. So what worked in Iraq was a failure in Afghanistan and Petraeus has to take responsibility for that. I-- I believe because he’s partly responsible. He and the other military brass who rolled Obama, basically, kept putting pressure on him to-- to repeat in-- in Afghanistan what--- what did not work in Iraq, at the same time, Libya. And again, these-- these are two stories that are tied together like this. We have completely over militarized our foreign policy. Our foreign policy is all about numbers of troops and generals. We forget they are diplomats-- they are diplomats that go to dangerous places, and sometimes, David, they get killed. It is a tragedy. To me, Libya is not a scandal. It’s a tragedy. It’s a story of a-- I think incredibly courageous ambassador who wanted to work with the people on the ground and who produced something we have not seen since the Arab uprising, which is masses of Libyans on their own coming out to defend and praise our ambassador. Again, precisely the kind of authentic surge that makes something possible, precisely what’s missing in Afghanistan.

GREGORY: All right. Let me get a break in here. I want to come back, continue this, talk about the future of the Republican Party just as the president is trying to negotiate with the Republicans who avoid the fiscal cliff. More with our roundtable right after this.

(Announcements)

GREGORY: We’re back. Mike Murphy, the fallout from Mitt Romney’s discussion that basically Obama gave gifts to minority groups, that’s how he got re-elected. This is the time when the party is trying to figure out where it’s going.

MR. MURPHY: Well, unfortunate comment. I think we ought to have a rule that if you lose a presidential election, you know, you get a pass for a week because it’s like a bender you’re coming off.

MR. MURPHY: I-- I-- well, you know, look there’s a huge donor revolt going on. I mean, we have now lost the popular vote in five of the last six presidential elections. This is a existential crisis for the Republican Party, and we have to have a brutal discussion about it. We alienate young voters because of gay marriage, we have a policy problem. We alienate Latinos--the fastest growing voter group in the country because of our fetish and so-called amnesty when we should be for a path to immigration. And we have lost our connection to middle-class economics. We also have an operative class and unfortunately lot of which is incompetent. We don’t know how to win. So, this isn’t about new software in the basement of the RNC. It’s not about a few Spanish language radio ads. It’s a fundamental rethink that begins with policy because the country is changing and if we don’t modernize conservatism, we can go extinct. The numbers are the numbers.

GREGORY: And Congressman I have talked to other Republicans who say that the problem with Romney is that he doesn’t get it. I mean, it didn’t take long for them to turn on the former nominee and say unfortunately this point of view is something that he had in the course of the campaign.

REP. LABRADOR: Let-- let’s start out by saying that Romney was a good man. Anybody who knows Romney…

GREGORY: Yes.

REP. LABRADOR: …understands that he is a good man, that he would have been a good president. But he didn’t know how to communicate the message of conservatism. And I agree with Mike a little bit but we need to be careful that we don’t completely shift the party. We don’t need two liberal parties in Washington, DC. We need one conservative party and one liberal party. I think the problem that Romney had throughout the campaign is that he couldn’t talk about conservatism like conservatives talk. I-- as I heard somebody say, he talked about conservatism as if it was a second language to him. We need to-- there are things about the conservative movement that actually-- we-- we believe in small government, but we also believe in the individual. There are too many Republicans here in Washington, DC, and they are actually defending big business. They are defending the rich. I didn’t become a Republican to defend the rich. And-- and what we need to understand is that big business loves big government, because they get all the goodies from big government. They get more-- they get less competition. The more that government grows, the more that big business actually benefits from the tax code and from the regulations and from all those...

GREGORY: John, on the other side of this, you were at the White House this week, meeting with the president, part of the progressive groups, stressing an agenda. Where is your sense? Is this a president ready as President Bush said to spend his political capital and fight hard or does he see his mandate for compromise, and does that mean give up some?

MR. PODESTA: Look, I think the-- the quality of this election, the big loss of Hispanics and Asian voters, young voters, is a significant story but the big story in this election was that Obama won on the economy. People thought that Romney was competent, but when they-- in the exit polls they asked whether economic-- his economic policies favored the wealth-- wealthy, 53 to 34 people said yes. And I think that Obama came into that meeting with a tremendous amount of confidence and energy, that he had put the question before the American people, sixty percent of the American people said yes, as part of this fiscal cliff deal, taxes have to go up on the wealthy, and he-- he goes in with great strength, more leverage. And I think he’ll get a good deal in the end of it.

MR. MURPHY: I-- I think they’ll get a punting deal. But I want to quickly respond to one thing because this is very fashionable now to beat up Romney and-- and he made an unfortunate comment after the election. But the biggest problem Mitt Romney had was the Republican primary. That’s what’s driving the Republican brand right now to a disaster. And we have got to get kind of a party view of America that is not right out of Rush Limbaugh’s dream journal. We got to look at reality.

GREGORY: Congressman, look at the Tea Party, what’s the future of the Tea Party? You know, you heard the likes of Bill Kristol saying you know, can’t they-- they should-- we should give up some of this protection of-- of tax cuts for wealthy Americans. Are you prepared to give up on that particular point to get a larger deal which includes cutting government back significantly?

REP. LABRADOR: I’m not if what it means is that we’re going to raise taxes and we’re not going to decrease any spending. If you-- if you remember that-- that moment in the-- in the primary where they asked all 10 candidates --

REP. LABRADOR: The 10 to one. I would have answered the question different. I would have raised my hand and I would have said, yes, I am willing to do it if the 10 dollars in spending cuts happen today. Because what happens in Washington, DC, is that we spent-- we do increase in taxes today and we promise that there’s going to be spending cuts 10 years from now. And it never happens. It didn’t happen under Reagan. It did happen under Bush. And it’s not going to happen again if we’re not willing to do that.

MS. MITCHELL: And that’s why we’re talking about some sort of trigger mechanism which would be enforcing because there is agreement all around that-- that Boehner wants a deal, the speaker wants a deal, but he cannot sell a deal, even with the goodwill that he thinks he and the president have on that right now, unless there is real Gramm-Rudman type, real requirements, that these things go in simultaneously. And that’s what Jim Baker wrote about recently, who’s had that experience of fashioning exactly that kind of deal.

(Cross talk)

MR. FRIEDMAN: Well, it’s important, though, that…

MR. MURPHY: Well, this is a systemic problem, can’t cut spending in the future. Yeah, you can raise taxes…

GREGORY: There has to be two…

MR. MURPHY: …with one Congress, it takes five Congresses to cut spending.

MR. FRIEDMAN: I think it’s really important, though, that we keep the focus on growth…

MR. FRIEDMAN: …not-- not-- not spending cuts, you know, that the goal here is to get our growth from, you know, one plus percent-- between one to two percent up to three and four percent. If we don’t get growth going, none of this is going to matter at all. And I think it’s really important as the president frames this that he frames his goal as growth. And, therefore, I need this kind of tax increase for these people. I need this kind of spending cuts here, because it’s going to leverage this kind of growth. But that’s…

GREGORY: And that’s new-- but that’s new spending. That’s what the president talks about, John, to-- to invest in infrastructure and such to create the kind of…

MR. PODESTA: And-- and he needs a fiscal framework that’s going to-- that’s going to deal with the deficits that we have out in the out years, and he’s put a plan on the table to manage that, to get the debt stabilized and then going down. But he’s got to have investments in infrastructure, investment in education because that’s going to power the economy going forward.

MS. MITCHELL: But his best arguments…

(Cross talk)

REP. LABRADOR: He’s talking about more spending…

GREGORY: Right.

MR. PODESTA: He'll-- he'll-- you know, he’s put-- he is willing to do further cuts in-- in-- particularly in health care and-- and mandatory programs.

GREGORY: Yeah.

MR. PODESTA: But it has to come along with tax rises on the top two percent.

GREGORY: All right. I’ve got to get another break in. More in just a moment.

(Announcements)

GREGORY: Thank you all very much for a great discussion. I wish we had a second hour today, there’s that much to get to, but we’re going to have to leave it there. Before we go, a quick programming note for this week’s PRESS Pass. I go behind the scenes of the new Spielberg film-- film Lincoln with presidential historian Doris Kearns Goodwin, whose biography, of course, in the 16th president Team of Rivals was the inspiration for the movie. Watch it at MEET THE PRESS, nbc.com, terri-- terrific insights into-- into the film. That’s all for today. Have a Happy Thanksgiving. We’ll be back next week. If it’s Sunday, it’s MEET THE PRESS.